Why Did Your Binge-Watching Bill Go Up?
2 Jun 2025 6:00 PM IST
In May, Amazon Prime announced that it will add ads to its basic plan starting June 17. If you don’t want ads, you need to either pay an extra 129 rupees per month, or 699 per year.
OTT was supposed to disrupt television, but it’s begun to look a lot more like its predecessor now. What’s up with that?
Find out more in this episode of The Signal Daily, featuring Vanita Kohli-Kandekar and Aroon Deep of The Hindu.
NOTE: A machine transcribed this episode. A human has looked at this text but there might still be errors. Please refer to the audio above, if you need to clarify something. If you want to give us feedback, please write to us at [email protected].
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TRANSCRIPT
Kudrat (Host): In the latest season of Black Mirror, the British show about a technology fueled dystopian world, there’s an episode featuring the actress Rashida Jones. In it, she has an accident which damages her brain. When the doctors declare her brain-dead, a biotech company rep approaches her husband and convinces him to get this futuristic brain chip for her. The chip itself is free, he just needs to pay a small monthly subscription fee.
At first, things are great. Rashida’s character just needs a little extra sleep to heal each night. Then, every few months, the company keeps increasing their monthly subscription fee. Her construction worker husband picks up another shift, as does Rashida’s character. And repeat. And once again.
They realise they simply cannot go on like this. Soon, things get so bad that…spoiler alert, in order to get the company and their wild subscription fee off their backs, Rashida’s husband has to kill his own wife.
Bleak, I know. I’m not just telling you this to scare you or give you unnecessary spoilers.
But rather, because that’s the story some people on the internet have been recalling after a recent news announcement. Which is that Amazon Prime said that it will be adding ads to the basic plan that so many of us subscribe to. If you don't want ads to disrupt your programming, you’ll have to pay another 129 rupees per month, or 699 per year.
Are rising prices and more ads the future of OTT?
Kudrat (Host): I’m your host Kudrat Wadhwa and you’re listening to The Signal Daily. We don’t do hot takes. Instead, we’ll bring you deep dives into the how and why of consumer trends.
In this episode, we’ll learn about OTT platforms and advertisements. What started as a model to disrupt TV has begun resembling its predecessor a lot more now. What’s going on here? I spoke to media expert Vanita Kohli-Khandekar, who has a podcast with The Core called The Media Room, as well as tech journalist Aroon Deep to find out.
Interview with VKK:
Kudrat: So in your, based on your reporting and knowledge, like why is this announcement coming right now and what does this mean for consumers and subscribers to Amazon?
Vanita: It's been on the cards, not just from Amazon, but from all streaming services. Uh, because remember, India is what, 250, 300 million homes? It's about a billion and a half people, 900 million TV viewers. So those are big numbers. And where does streaming services so far Reach.
Streaming services so far, reach only about 250 to 300 million people. About 125 million subscribers. I'm sorry I'm throwing a lot of numbers at your listeners, but essentially, and growth has peaked there for subscription services. Now, if streaming services want to grow further, they have to go down the pyramid to the middle and the lower rungs of the market, and that does not mean middle and lower in terms of taste.
It means middle and lower in terms of income.
Amazon Prime. Was a service offered to shoppers on Amazon. Video was thrown in as a, as a thing to act as a glue. Prime video was, I mean, it was never a free service. It was part of Amazon Prime it. It was free because it came with Amazon Prime.
Kudrat: I've also read that Indians. Uh, we have some of the highest subsidized prices when it comes to streaming. So, um, was the strategy of these platforms to basically just gather as many subscribers as possible with, uh, low prices?
Vanita: Yeah, but there are differences. Kura? Yeah. In the thing. So for example. Prime video can afford to be part of this thing because it is meant for people to buy more shoes. Mm. More vacuum cleaners and more whatever. Yeah. I mean, Zo said that famously, so they really, when they launched, they didn't care if they make money from it.
Mm. Now it's becoming, because it's, it's, you know, it's got, it's competing for Emmys. It's one, some awards also. It's, it's doing a very good job for a service which is being bankrolled by one of the, the largest shopping site in the world.
So it's, it's a normal, um, uh, expansion, uh, evolution thing happening. The reasons for each one is different.
Kudrat (Host): Right now, as Vanita told The Signal Daily, streaming services like Amazon Prime and Netflix still don’t have a mass reach. Prime’s strategy, then, falls into their desire to reach out to more people. They’ve also launched MX Player, for instance, which has more Indian content that we might call “massy” and it’s free and full of ads.
In addition to wanting to reach more Indians, Netflix and Amazon Prime also want to earn money. Amazon didn’t care much about earning money through their video streaming service earlier, since an online marketplace and deliveries were their primary product. Getting ad revenue will help them earn money, which they can then invest in making quality shows for us to watch.
Right now, Indians pay very little for streaming, compared to what Americans pay for Netflix and Amazon Prime, for instance. That might have been a good strategy for when the two companies first entered India, but of course, they were not gonna be able to maintain that forever.
I spoke about this in more depth with Aroon Deep, a tech journalist with The Hindu who’s previously also covered OTT platforms for Entrackr and Medianama.
Interview with Aroon:
Kudrat (Host): So, uh, my first question is, um, what do you make of this announcement of Amazon Prime? That they now have ads and that users will have to pay extra if they don't want ads.
AD: I think this has been a long time coming, um, because I. Uh, the entire streaming ecosystem is incredibly subsidized, right? I mean, even when Amazon Prime itself launched in India, uh, there were articles coming out saying that, okay, the value of what they're offering is probably something like 4,000 rupees a year, right?
In terms of how much the video service as well as the delivery subsidy, all of that collectively costs them, uh. Pretty much that much. And that was like in 2016, 17. Right. And obviously the cost must have gone up, but we are still not even in a [00:01:00] place where it costs anywhere near, uh, four grand. I mean, right now, the Prime Service, without that, uh, add-on that they have introduced for ad free streaming.
It's 1500. It's still very close to the launch price. So, uh, even if you look at something like Netflix, which is the closest you will get to a large mainstream streaming service that is actually trying to earn a bit of money from subscribers in India.
They have steadily raised their prices everywhere else in the world, um, or at least in their main markets, but they never really did that in India. So it launched. The most expensive plan in India launched at 800, and in fact, they reduced that price to six 50. Okay? And it is still six 50. They are not really even talking about price increases in India.
And meanwhile, in the US the most expensive plan is already more than double what it costs in India, right? And back. [00:02:00] Then we were complaining about price. And even now I think we have some people complaining about pricing .
You know, you, the, the levels of subsidy that we still have are something that I think will have to be rolled back. So it's not even just a question of raising prices, it's about kind of paring down the subsidy over time.
Kudrat (Host): So why do you think that, uh, they introduced such heavily subsidized prices for the India market?
AD: So I think that whether it is a domestic company or a foreign company, right?
This is. Currently a generational play. And what I mean by that is, uh, they are not really expecting to earn any money in and of itself for the next decade or so. I would, uh, go so far as to say that, uh, they are happy to just, uh, be known and be on people's devices, uh, build a presence across.[00:03:00]
Every kind of, uh, viewer who can eventually afford their services and have their foot in the door. And I think that is where we still are to some extent, because the total addressable size of something like premium streaming, which what, which is what Netflix provides
I think that is still. You know, the population of Hong Kong in terms of unique individual subscribers for India. So I think they are kind of waiting it out, but at the same time, they don't want to be irrelevant in the future when, uh, the ecosystem inevitably kind of evolves as the economy gets, uh, larger and so on.
I think it's also a generational play that, uh, you know, has to kind of progress in some way. Now a price increases going to be incredibly unpopular. I think Amazon has done it. Maybe twice. Okay. For Prime. Right. And in fact, the first price increase was not even a price increase. It was essentially the removal of a discount that was being applied by default. So if you got Prime the first year, I think it was something like 500 rupees, but then it would say, oh no, it's not 9 99, which is the MRP.
It is 4 99. And then eventually that went away. Right?
And now it's basically 1499. Mm-hmm. Now 1499 to where Amazon wants to be is. Really long ladder. Yeah. In fact, where they have to be is also a really long ladder. Yeah. And you know, they can make some money out of ads. They can also kind of figure out who it is that can afford to really pay.
And I think I. That statistic alone might have been enough for them to decide that, okay, let's include ads and see kind of let's shake the trees and see what falls, right? Yeah. To see how many people are willing to pay. Okay, how big, big is this real, this market that we are actually trying to see what is the appetite for, uh, content and how much of that appetite is really backed up by a willingness to pay, because that is really what's going to drive, uh, this global o ott industry survival as well, right?
In the coming decade or so.
Kudrat (Host): So based on your reporting, uh, how popular do you think, uh, the ads model will be in India?
AD: I think since we are spoiled, I think it'll be very unpopular in the kind of emotional sense that, Hey, I was not getting ads yesterday. Why am I getting ads now?
But I think that. Because there is so much ad supported, uh, kind of streaming already going on across all these streaming platforms. I mean, if you look at something like Geo Hot Star. Geo Hot Star has ads for the IPL, even if you are the highest tier subscriber. Right? So, and that is basically the bulk of an Indian.
Streaming customer's experience, right. Of the average streaming customers that IPL. And if they're used to it on IPL, I think they will be able to get used to it elsewhere. And I, I think Amazon is also trying to play it a little bit, uh, cautiously because the risk of angering your customers is just not worth it.
The cost per million on something like YouTube. Uh, which is a metric that determines how much a video earns. Every time it gets a million impressions, it's something like one 10th of what it is in the US for India. So it is literally not worth the trouble of kind of angering their customers too much.
Yeah. But I think maybe, you know, a pre-roll add and maybe something towards the middle, I think people will be generally not mind. And if they do, I think it'll be. Easy enough to nudge them to pay.
Kudrat (Host): Is there anything else that you'd like to add?
AD: I think we should not take for granted just kind of how early we are in streaming. Yeah, as an ecosystem we are, I mean, a lower middle income country, that still remains the case, right? Yeah. It's a deeply, deeply unequal country, and essentially we are far more pampered than we realize, right? I see this kind of complaint all the time, maybe not with advertising, but something like, oh, this movie that just came out in the cinemas maybe a month ago.
Why are you not streaming it for free? Why are you asking me for rent? I mean, mm-hmm. Uh, people don't understand that the standard is. Like, you know, a movie comes out in the theater, you wait for three months, then you kind of have a chance to rent it. Yeah. And then another three or 4, 5, 6 months pass, and then it comes out on streaming.
Here we are already kind of on the verge of rioting when we can't see something for free, or at least for no additional charge a month after it was just released. Right. Yeah. And with, uh, a movie that just came out, that window has essentially shrunk to two weeks. And I think we should really kind of also understand that nowhere else in the world does it work like this.
Hmm. And we should not really be surprised by any moves, even if they are baby steps towards rationality, whether it is kind of a price increase, which will probably happen uh, in the coming couple years, or the introduction of ads on the tiers that are already there. This is something we have seen everywhere else in the world.
Yeah. And we shouldn't consider ourselves as an exception. In fact, this is something that is probably going to become more and more common here, much faster than elsewhere.
Kudrat (Host): That’s all for today. You just heard The Signal Daily. We don’t do hot takes. Instead, we’ll bring you deep dives into the ‘how’ and ‘why’ on consumer trends.
The Core produces The Signal Daily. Follow us wherever you get your favourite podcasts. To check out the rest of our work, go to www.thecore.in.
If you have feedback, we’d love to hear from you. Write to us @[email protected].
Thank you for listening.
